Contracts can be a vital tool to help businesses fulfill specific needs. But if one party violates the terms of the agreement, they may have to compensate for their damages if found guilty.
However, there may be certain details within a contract that could make it invalid.
What makes a contract valid in Colorado?
Several factors can determine a contract's validity. Here in Colorado, a legally binding contract consists of a written or oral offer made by one party that is accepted by another. The agreement must also support a payment or other exchange that is acknowledged by both parties. If any of these elements are missing, the state may not recognize the agreement.
Reasons a contract may be considered invalid
Here are a few ways an agreement could be deemed null:
- The contract is fraudulent: In some cases, a deal may be considered invalid if one party fails to disclose or misrepresents information in the agreement.
- One party is under duress: If one party forces the other into a deal through threats or intimidation, this could dismiss the agreement because it was not made willfully by both parties.
- One party is under influence: Similar to duress, influence refers to one party having power over the other and using that power to force the other party into an agreement.
- The contract was formed by mistake: Both parties involved in the agreement could make an error regarding the contract’s subject matter. If the defendant can prove both parties are responsible for the mistake, the contract can be voided. However, if an error was made by only one party, the contract can still be considered valid.
Contracts can be complicated
When businesses form contracts, they are making a legal promise to fulfill the obligations outlined within them. And while a contract can appear valid at face value, it may not always be legally binding. If you have concerns about a current contract your business is in, an experienced attorney can help examine the details of the agreement and determine if it is enforceable.